A number of policies designed to make sure big business plays by the same rules will be introduced including pay transparency, a requirement for the largest companies to publish their pay ratio – the salary gap between executives and the wider workforce

The move is designed to quell public concerns about the justifications for top pay packages

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Government moves to curb excessive boardroom pay have received a mixed but generally positive welcome even though plans are believed to have been dropped to implement binding shareholder votes on executive remuneration.

A number of policies designed to improve pay transparency are set to be introduced, including a requirement for the largest companies to publish their pay ratio – the salary gap between executives and the wider workforce.

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Listed firm with significant shareholder opposition to executive pay packages will also have their names included on a public register under the reforms.

The move is designed to quell public concerns about the justifications for top pay packages.

It comes after Prime Minister Theresa May branded fat-cat bosses the "unacceptable face of capitalism".

Luke Hildyard, policy lead on stewardship and corporate governance at the Pensions and Lifetime Savings Association (PLSA), said a recent survey by his organisation found 84 per cent of pension funds are concerned about pay gaps in listed companies.

“Today's forthcoming announcement that companies will need to disclose and explain the pay gap between their chief executive and ordinary workers is to be welcomed,” Hildyard said.

“For the average chief executive to receive 128 times the average pay of their staff is hard to justify and appears disproportionate in almost any circumstances.

“We are hopeful that today's announcement is a concrete step forward which will see a more measured and transparent approach to executive pay.

“However, we would like to have seen stronger requirements in place on companies with regards to their CEO pay policies. Requiring a supermajority (75 per cent) rather than a simple majority (50 per cent) means that it would be harder for companies to force through pay proposals despite serious reservations from their most engaged shareholders.”

Paul Drechsler, president of the Confederation of British Industry (CBI), said pay ratios could prove a useful addition to the debate about executive pay if they include “meaningful context”.

He added that a public register of top salaries would help “shine a light on the small minority of cases that warrant greater attention”.

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“Good corporate governance is an essential ingredient of business performance and the bedrock of trust between business and society,” Drechsler said. “We know that how companies act and behave determines the way people think about business.

“Companies take this seriously and look forward to working closely with the Government to ensure the UK maintains its reputation as a global leader in this field and as a primary location for international investment.”